2017, a year punctuated by intense bidding wars and price fluctuations, is now officially in the books.
While home values increased substantially – a metric that would normally be of comfort to homeowners and those looking to invest in Kitchener-Waterloo real estate – last year’s price volatility, combined with the brand new mortgage qualification rules, have left many feeling uncertain about what 2018 will bring.
So…what will 2018 bring?
Here are my Top 5 trends to watch for this year:
1) Competition in the sub-500k market.
While the new mortgage rules will force part of this buyer pool out of the market entirely, it’ll also pull in some of those who would normally be shopping above 500k.
The most affordable options in the marketplace will continue to be in demand.
2) GTA Buyers.
We’ve seen this movie before: affordability drops, demand for homes remains strong, buyers flock to neighbouring cities where homes are affordable.
This is something that I covered in last year’s market prediction, and it turned out to be a big factor in last year’s bidding wars.
And now that virtually all GTA buyers have seen their purchasing power drop, making already pricey homes that much less affordable, we may very well see increased migration to K-W (despite rising prices, we are still much cheaper).
3) Demand for Rentals.
As homes become less affordable, some potential homebuyers will decide to rent.
We’re already seeing evidence of this, with the Waterloo Region vacancy rate dropping below 2% despite over 2,000 more rental units being added to the market.
Another contributing factor: K-W’s improved urban lifestyle, complete with more work, dining, entertainment, and – soon – transit options via the ION LRT. For many, it’s a lifestyle choice that has nothing to do with economics or market conditions.
4) Rise of the Condo.
Affordability, urban lifestyle, simplicity for young professionals, security for single female buyers (a growing segment of our market, by the way) – all factors that point to a hot condo market.
Not only were multi-unit (condos and towns) housing starts way up in 2017, Kitchener is projected to issue permits for TWENTY new developments by 2019.
AND, since there will be an influx of renters, there will be plenty of investors ready to snatch up available units.
5) Home Values Will Increase.
Maybe not by 10-15%, but I strongly believe we are a unique position to see gains regardless of any market-dampening rules introduced by our government.
The reason? Demand.
When it comes down to it, our region continues to see significant economic, infrastructure and real estate investment. There’s a lot to love about living here, we have the fastest growing tech talent pool in the country – and our homes are still MUCH cheaper than neighbouring cities to our east. Employers know it. Developers know it. Buyers know it.
Jobs, education, safety, proximity to Toronto, and relative affordability will continue to make Kitchener-Waterloo a popular place to purchase real estate.